Mark McDermott

Court rules Manhattan Beach cannot ban coastal short-term rentals

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The Emoji House was the subject of controversy in the coastal zone of North Manhattan Beach because of a feud that started when owner Kathyrn Kidd offered short-term rentals in defiance of the city’s ban. Kidd was fined $3,500 by the city. That ban has been overturned by a Superior Court judge, leaving such fines in question. Photo by JP Cordero

by Mark McDermott 

A Los Angeles Superior Court judge has overturned Manhattan Beach’s ban on short-term rentals in the city’s coastal zone, ruling that the prohibition violates the California Coastal Act. 

Judge James C. Chalfant, presiding over a challenge to the city’s short-term rental ordinance brought to the court by Manhattan Beach resident Darby Keen, ruled that the city could not enforce any such ban except through an amendment to its Local Coastal Plan approved by the California Coastal Commission. 

“The City may not avoid its duty to seek Commission approval of its STR ban in the coastal zone as an LCP amendment, and must refrain from enforcing these prohibitions in the coastal zone without the [Coastal] Commission’s approval,” Chalfant wrote in his ruling, issued in early July. 

The City Council enacted a ban on short-term rentals in 2016 and then passed a more aggressively enforced ban in 2019. The latter included the hiring of an outside firm to pursue not only short-term rentals but to identify the offering of such rentals on popular online platforms such as Airbnb, HomeAway, and Vrbo. The 2019 ban included $1,000 per day fines for short-term rentals.

The Council was responding to widespread resident concern. As online platforms like Airbnb proliferated, hundreds of short-term rentals were listed in Manhattan Beach. At public hearings and during the City Council election just prior to the 2019 ban, residents expressed concerns that such commercial activity would erode neighborhood character. 

But attorney Frank Angel, who filed the lawsuit against the ban on behalf of Keen, argued the Council overreached in its attempt to regulate short-term rentals and in so doing flew right in the face of the Coastal Act, which is intended to protect public access to the coast.

“That 2019 ordinance, and the enforcement crackdown, has been extremely drastic, as seen through the lens of my client and many others in the city,” Angel said. “The City Council enacted a really cruel, exclusionary policy.” 

Angel said the judge zeroed in on the distinction between the “few party houses” that created nuisances and most other short-term rentals. Anything that creates a nuisance, Angel said, is enforceable through other city codes and did not require an outright ban of short-term rentals. 

“My client’s guests typically have been parents or grandparents who live in the South Bay and all they wanted was to be together as a family unit with a kitchen and a place large enough for their entire family,” Angel said. “As was very typical, for my client, neighbors never had occasion to complain and they never did….These were parents and grandparents who just wanted to be together at the beach, and they have been prevented from doing that. Public access to the coast is a central goal of the Coastal Act.” 

In his court filings, Angel noted that the city initially sought to amend its LCP with Coastal Commission approval back in 2015 and 2016. Additionally, the city’s Planning Commission recommended in 2015 that rather than a ban the city take a more regulatory approach, limiting the total number of short-term rentals per house to one every three months and four per year. In 2016, the Chairman of the Coastal Commission issued a statement noting that outright bans violated the spirit of the Coastal Act and affirming that regulations on short-term rentals should be achieved through LCPs, which the Commission oversees. In 2017, Manhattan Beach withdrew its proposed amendments from Coastal Commission consideration, and 2019 unilaterally enacted a ban with the rationale that 

It represented no real change —  that short-term rentals had never been allowed under city code. Angel said Judge Chalfant rejected this argument. 

“That was the argument but it wasn’t true,” Angel said. “The judge said if it was always policy, then why prohibit [short-term rentals] now?” 

City Attorney Quinn Barrow did not respond to requests for comment for this story but indicated in other press accounts that the City was considering an appeal. Angel suggested the opposite course of action made more sense —  that the City Council should immediately overturn its own ban and gain approval from the Coastal Commission for a more reasonable set of restrictions for short-term rentals. 

“We are asking council to quickly put an end to it, because it makes no sense, because the harm not just to people who would like to have access to The Strand and the beach who are being excluded, but also harm to property owners forced to pay fines and to sell homes, all based on an illegal ordinance and an unlawful crackdown,” Angel said.

Update: City Attorney Quinn Barrow issued the following statement: 

“As you may know, the City already permits short-term rentals in its commercial zones with a use permit, including within the Coastal Zone. Thus, in essence, the ruling affects only the residential portions of the Coastal Zone. We are currently in discussions with the attorney representing the property owner regarding the content of the judgment. The City hopes that the parties reach agreement soon. The court has scheduled a hearing to consider the proposed judgment on August 27, 2020.  The hearing on the judgment may not occur if (a) the parties reach agreement on the form or (b) the parties do not reach agreement and submit objections, and the court just decides what to do without further input from the parties.

 We may be in a position to provide more information at the end of August, if the Judge issues a judgment in the case by then.”

Attorney Frank Angel also offered an update, noting that the hearing is actually Aug. 25 and that he has been contacted by an in-house attorney for Expedia/VRBO. 

“They are very interested in reviewing the decision,” Angel said. “Which goes to the question…of the city’s potential liability exposure. It goes not just to lost vacations for guests and lost rents for many [Manhattan Beach] citizens, but also lost booking fees for AirBnb, VRBO et al. All as a result of patently unlawful ordinances.

“What a mess this city attorney maneuvered Manhattan Beach into,” Angel said. “At what cost to the taxpayers? It didn’t have to be this way. Again, we offered to settle twice, including first ‘before’ we sued. But, without explanation, he steadfastly rejected my simple offer to avoid the litigation by the city council suspending enforcement of the ban in the coastal zone and submitting it to the Coastal Commission for review and approval, as required by law.”

 

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